In its update to its projections for the budget and economy, the agency slightly upped its estimate for the 2014 deficit, which it now expects to total $506 billion, a $170 billion decline from 2013.

That’s lower than the White House’s projection of $649 billion and would be the smallest deficit since 2007. For the first time, the CBO expects federal tax revenues to eclipse $3 trillion, compared to $3.5 trillion in total spending.

Deficits will continue to shrink next year, according to the CBO, lowering the federal debt. But then they’re expected to begin rising again in 2016, eventually bringing the federal debt up to 77 percent of GDP in 2024.

That debt trajectory will have serious consequences if unaddressed, the CBO warns, including “restraining economic growth” and “eventually increasing the risk of a fiscal crisis.”

The total cumulative deficits between this year and 2024 will be $7.2 trillion, the CBO said. That’s $422 billion less than their previous estimate, a change mostly due to the agency’s expectation that interest rates will not return to historical ranges even after the economy has recovered from the financial crisis, lowering the Treasury’s payments on federal debt interest payments.

The forecasters at the CBO share the view of economists in the Obama administration and at the Federal Reserve that the economy’s poor performance in the first half of the year was partly due to the brutal winter that slowed sales in many states. They have higher expectations for the economy over the next few years than Fed or Wall Street forecasters do, projecting GDP growth to rebound to 3.4 percent annually.

The CBO predicts that the cyclical effects of the recession that officially ended in 2009 will only finish playing out in 2017, when job and output growth will have returned to their potential. In the meantime, the CBO believes there’s plenty of “slack” – unused resources and underemployed workers.